Agenda item

Budget/Council Tax 2016/17

To consider a report by the Director (NE) (reference 16/57 (attached)):

 

(i)            Council Tax Resolution

To set the amount of Council Tax for the area for each band for the financial year 2016/17 and the payment dates.

 

Note:- the recommended level of Council Tax increase for a Band D equivalent property is £5.00 (2.37%).

 

(ii)          Financial Strategy (attached)

Minutes:

The Council considered a report by the Director (NE) (Reference 16/57) which sought approval of (i) the level of Council Tax for 2016/17, and (ii) the Council’s Financial Strategy 2016-2026.

 

Council Tax Resolution 2016/17

(i)            In moving the Council Tax Resolution (which was duly seconded), the Portfolio Holder for Finance, Procurement and Legal, Councillor Mrs Mallory explained that the proposed increase of 2.37% (£5 for a Band D equivalent property) for 2016/17 would cost each household an additional 79p per year compared to the original proposed increase of 1.99%.  This would raise an additional £29k for the Council which would effectively enable the authority to continue supporting Create Arts Development in 2016/17.  Councillor Mrs Mallory reminded the meeting that the Borough Council had not increased its proportion of Council Tax since 2010, a proportion which constituted 13% of the total Council Tax which the Borough Council collected on behalf of the County Council (including its Adult Social Care precept), the Police and Crime Commissioner, the Fire Authority and the parish and town councils in the Borough.  Councillor Siddons supported the proposed increase, but was critical of the Council’s decision not to increase the Council Tax level over the previous five years, as the Labour Group had proposed, condemning the Conservative administration’s management of the Council’s finances   Councillor Siddons contended that following his Group’s advice, would have enriched the Council’s base budget by an extra £795k thereby putting the Council in a stronger position to protect services which had been lost.  He also criticised the low Transitional Grant and Rural Services Delivery Grant the Borough Council had received from the Government when compared with Hambleton and Ryedale – a settlement which penalised all communities in the Borough.  Councillor Randerson urged all Members to vote in favour of the proposed increase, not as a statement of support for the Conservative Group, but in the best interest of residents.  Councillor Billing welcomed the Council’s continued funding for Create and requested further explanation of how £120k savings would be achieved from transformational change to balance the 2016/17 budget.  Councillor Broadbent voiced concern at the cumulative impact of all the precepting authorities’ increases in Council Tax on struggling families, and asked that the additional income raised prioritise the vulnerable in society.  Councillor Mrs Cluer also expressed her support for the recommendation.  Councillor Mrs Mallory noted Members’ comments, maintaining that she was trying to do the best in difficult economic circumstances for all residents of the Borough.  The proposed Council Tax Resolution was then put to the vote and was carried, as recorded below:

      

For

Cllrs Abbott, Allanson, A Backhouse, L Backhouse, Barnett, Bastiman, Mrs Bastiman, Billing, Broadbent, Chance, Chatt, Cluer, Cockerill, Colling, Coulson, P Cross, S Cross, Dennett, Dodds, Donohue-Moncrieff, Fox, Green, Inman, Jeffels, Jefferson, Jenkinson, Lynskey, Mallory, Maw, Moody, Mortimer, N Murphy, Nock, Pearson, Phillips, Plant, Price, Randerson, Ritchie, Siddons, Smith, Swiers, Trumper, Turner, Vesey, Walsh, Warburton

Against

-

 

Council’s Financial Strategy 2016-2026

(ii)          In moving the Financial Strategy and its recommendations (which were duly seconded), Councillor Mrs Mallory commended the courage and resolution shown by Members and officers in making difficult decisions in very challenging economic times.  The next few years would call for equally difficult decisions since sadly the Council’s financial support from the Government would not be enough for the authority to fulfil even its statutory duties.  Councillor Mrs Mallory and other Cabinet Members had related their concerns about future funding for this Council both to Mr Goodwill, the MP for Scarborough and Whitby and to central Government.  She believed that the Council would have to continue to change the way it worked to meet this challenge and do the best for the Borough’s residents.  She also thanked councillors for their participation in the budget briefings.  Other Members then commented on the Financial Strategy.  Councillor Chatt thanked residents for embracing the new Garden Waste Collection Scheme - some 9,500 residents had purchased licences to have their garden waste collected.  Councillor Cockerill expanded on the capped budget of £3m to be earmarked for Coast Protection Schemes.  This would be used as a mechanism principally to secure the major element of external grant aid for both coast and flood protection schemes, and would provide a safeguard where there was the possibility of further work being required.  He added that allocation of the budget would be subject to rigorous scrutiny, and was confident that not all the budget would need to be expended to bring all the Council’s current major coast and flood protection projects to completion.  Councillor Jenkinson reported that the number of photocopiers in the authority had been reduced from 38 to 23, generating savings of £42k over four years.  Councillor Mrs Cluer voiced the Green Party Group’s opposition to the Financial Strategy, citing the effects of service cuts on people and the environment, and the reduction in service quality and support to the community.  Councillor Mrs Jefferson noted the £4m allocated for the regeneration of the Futurist site, and given the high profile nature of the project and its significant financial implications and risk for the Council, queried when further details would be coming to the Cabinet and full Council for discussion.  Councillor Sam Cross shared Councillor Mrs Jefferson’s concerns about the borrowing required to finance the redevelopment of the Futurist, which he believed would have a detrimental effect on local services.  Councillor Siddons related the Labour Group’s concerns about the Financial Strategy which they could not support.  These centred principally on the Council’s increasing reliance on New Homes Bonus, Business Rates and Council Tax revenue as the Revenue Support Grant was phased out.  Given that both New Homes Bonus and Business Rates revenue was set to reduce over the next five years, he believed the Council’s only flexibility to raise revenue was through the Council Tax payer and further reductions in services.  Councillor Siddons maintained that the Labour Group supported a Council Tax level that retained essential services, welcomed projects which benefited the Borough, but would continue to criticise where appropriate, whilst encouraging the Council to look for new ways of providing essential services.  However, he felt that the Financial Strategy did not provide enough of the innovation required.  Other Members of the Labour Group criticised the Strategy for its incompleteness and lack of long term strategic thinking.  The Portfolio Holder, Councillor Mrs Mallory responded by agreeing with Councillor Siddons that the Council would need to change the way it did its business to raise more revenue, as she had already stated; but she rejected the criticisms, holding that the Financial Strategy was a dynamic and forward thinking document.  In respect of the redevelopment of the Futurist, she explained that the figure of £4m in the report was based on internal working estimates together with anticipated land values.  At present, the scope of works, feasibility study and costings for the demolition were still being undertaken, so further detail and final figures were not yet available.     The Leader, Councillor Bastiman similarly rejected the criticisms of the Financial Strategy, commending Councillor Mrs Mallory’s first budget as Portfolio Holder, and reminding the meeting that this entrepreneurial Council had secured over £100m of investment in the Borough through the Leisure Village, Sands, and Middle Deepdale developments.  He also referred to the great economic benefits the Offshore Wind and York Potash industries would bring to the Borough.  The recommendations in the report were then put to the vote and were carried, as recorded below:

 

For

Cllrs Abbott, Allanson, A Backhouse, L Backhouse, Bastiman, Mrs Bastiman, Chance, Chatt, Cockerill, Coulson, Donohue-Moncrieff, Fox, Green, Jeffels, Jefferson, Jenkinson, Lynskey, Mallory, Mortimer, Nock, Pearson, Phillips, Plant, Smith, Swiers, Trumper, Turner, Walsh

Against

Cllrs Barnett, Billing, Broadbent, Cluer, Colling, P Cross, S Cross, Dennett, Dodds, Inman, Maw, Moody, N Murphy, Price, Randerson, Ritchie, Siddons, Vesey, Warburton

 

RESOLVED that the Council:

 

1         COUNCIL TAX RESOLUTION

 

(i)         Approve a Council Tax increase of 2.37% (£5 for a Band D Equivalent property) for the 2016/17 year, the formal Council Tax resolution at Appendix A and:

 

  That in accordance with Section 31A of the Local Government Finance Act 1992 (as amended by Section 74 of the Localism Act 2011) a net Council Tax requirement of £7,989,615 be approved for the 2016/17 year; which results in a basic amount (Band D equivalent) of Council Tax of £216.31.

 

2         FINANCIAL AND PROPERTY ASSET MANAGEMENT STRATEGIES

 

(i)        Approve the final Financial Strategy (Appendix B) with particular reference to the following recommendations contained within it:

 

-     Proposed efficiencies/savings totalling £1,788,101;

-     The balancing of the budget will rely on a £270k contribution from the General Fund Reserve;

-     £180k mainstream budget provision for increased contributions towards essential and priority capital investment and borrowing costs;

-     The creation of a one-off £594k ‘Investment Fund’ to invest in schemes that will drive forward future revenue budget savings;

-     Additional one-off funding of £405k in 2016/17 for the following areas: £10k corporate training programme, £250k for building works at Scarborough Spa, £25k for a Destination Marketing System, £30k for repairs to South Bay Underground Car Park, £32k towards a one-off increase in Open Air Theatre running costs, £5k contribution towards a bus service in Filey, £17k for a new box office for the Open Air Theatre, and £36k for Create;

-   Proposed additions to the capital programme as follows :-

o    Vehicle and Equipment Replacement (£1.189 million vehicle replacement; £117k equipment replacement; £189k IT equipment)

o    Planned Infrastructure Works (£100k replacement lighting columns, £642k for Robin Hoods Bay Coast Protection works, £3 million for Eskside Wharf stabilisation works)

o    Statutory Requirements (£685k Disabled Facilities Grants)

o    Asset Management (£1.14 million for Scarborough Spa)

o    Other (£4 million for the Futurist redevelopment, £387k for Pindar All Weather Pitch, £400k for Cemetery provision,  £80k for Whitby shelters, £250k for harbour dredging equipment)

-     A capped budget of £3m will be earmarked for Coast Protection schemes in the Council’s financial plans; funded from anticipated capital receipts and borrowing. £77k of this budget will be committed in 2016/17 towards the Robin Hoods Bay Coast Protection scheme and the remaining £2.923m will be included in future year Financial Strategies. A Coast Protection Strategy recognising this capped budget will be developed during 2016/17;   

-     The Invest to Save Strategy.

-     The Prudential Indicators and Minimum Revenue Provision Policy;

-     Treasury Management Strategy and Annual Investment Strategy; noting the following amendments:

o    Increased maximum investment limit per individual Local Authority from £5 million to £7 million;

o    Increased maximum investment limit for Nationwide Building Society from £5 million to £7 million;

o    Introduction of a third tier of building societies, with a credit rating of a Long Term and F1 Short Term, with a maximum investment limit of £2.5 million;

o    Inclusion of Police and Fire Authorities on the Council’s lending list, with a maximum investment limit per individual Authority of £2 million;

o    Increased maximum Group lending limit from £7 million to £10 million;

o    Increased maximum Group investment limit for nationalised banking institutions from £7 million to £15 million;

o    Inclusion of the Municipal Bonds Agency as a source of borrowing.

-      The Council’s Pay Policy Statement.

 

(ii)      Approve that authority to approve funding from the 2016/17 ‘Investment Fund’ be delegated to the Director’s Team in consultation with the Portfolio Holder for Finance, Procurement and Legal;

 

 

(iii)          Delegate responsibility for the acceptance of a four-year Local Governance Finance Settlement offer to Cabinet;

 

(iv)         Note and endorse the comments contained within the Chief Finance Officers Statutory Statement;

 

(v)          Approve the following Council Tax discount and premiums for the 2016/17 year, which remain unchanged from those approved for 2015/16:

 

·                0% Council Tax discount on Class B second homes

·                10% Council Tax discount on Class A second homes

·                0% Council Tax discount on properties undergoing major repair or structural alteration

·                100% discount for (Class C) properties which are empty and unfurnished for the first 28 days a property becomes empty, followed by a 0% discount thereafter

·                50% Council Tax premium for properties which have been empty and unfurnished for more than 2 years 

 

(vi)         Approve the final Property Asset Management Strategy (Appendix C).

 

Reasons

The Council is required to approve a balanced revenue budget and set its level of Council Tax for 2016/17. The Financial and Property Asset Management Strategies support the achievement of Corporate Priorities for the Council, and sets out the significant issues facing the Council and how these will be addressed, together with associated risk assessments.

 

The Chief Finance Officer has a statutory responsibility to ensure a balanced budget is set by Council, and to prepare reports to Members in accordance with the Local Government Act 2003 and other relevant Acts. 

 

 

Supporting documents: